Banks Tighten the Noose on Property Investors

Australia’s lenders are cracking down on property investors in an attempt to ease the property bubble in Sydney and Melbourne.

Over the last week some of Australia’s major lenders, including ANZ, CBA, NAB, AMP and Macquarie have announced rises of 30 basis points to their interest rates for existing investor loans.

To add to this AMP announced yesterday that they will not be accepting new, or assessing existing investor loan applications. They will also be adding a further 20 basis points to their interest rates.

The Australian Prudential Regulation Authority (APRA), which acts as the regulating body for all of Australia’s lenders, instructed banks last December to curb their investment lending growth to 10% annually. Despite this instruction investment lending growth has exceeded its limits this year and due to this APRA have released further regulations, changing the amount of capital that banks need to hold before they can lend money. This has spurred the recent rise in interest rates.

These changes have been made by APRA to slow the process of property market growth in Melbourne and Sydney, however the changes to investor loans are likely to affect all property investors across Australia.

The banks with the largest investment lending portfolios are being hit the hardest by APRA’s regulations and subsequently they will be the most costly funders for investment loans.

If you have any existing investment loans now is the time to review your options. You may be able to refinance your loan to a smaller bank before interest rates rise across the board.

Investment lending is becoming a tricky area to navigate and it has never been more important to seek professional lending advice before you speak to a banker.

Despite the new limitations All About Loans still has access to a wide range of lenders who have not yet been affected by APRA’s regulations.

Talk to us to receive free advice and guidance on your decision, whether it be to refinance or acquire a new investment loan.

Call 0732525208

Don Farquharson,

Loan Solution Expert

Owner & Principal Lender of All About Loans

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